Abstract

We use a sample of 800 firms in eight East Asian countries to study the effect of ownership structure on value during the
region's financial crisis. The crisis negatively impacted firms' investment opportunities, raising the incentives of controlling
shareholders to expropriate minority investors. Crisis period stock returns of firms in which managers have high levels of
control rights, but have separated their control and cash flow ownership, are 10–20 percentage points lower than those of
other firms. The evidence is consistent with the view that ownership structure plays an important role in determining whether
insiders expropriate minority shareholders.